Mayo Clinic Agrees To Pay $1 Million To Settle Claims In Federal Lawsuit

The Mayo Clinic and three related Mayo entities agreed to a $1.26-million settlement in a federal government lawsuit alleging that Mayo submitted false claims for payment to the government, including the Medicare and Medicaid programs, for surgical pathology services Mayo did not provide.

The suit was originally brought in 2007 under the qui tam, or “whistleblower,” provisions of the False Claims Act. That statute allows private individuals to file civil actions on behalf of the United States and share in any recoveries obtained as a result of those actions. Dr. David Ketroser, the lead whistleblower in this case, is a physician and an attorney. The suit focused on Mayo’s billing practices at its pathology laboratories in Rochester, Minnesota.

On September 20, 2010, the U.S. Department of Justice intervened in the part of the qui tam action that alleged that Mayo knowingly billed Medicare, Medicaid, and other federal health care programs for the preparation and examination of permanent human-tissue slides Mayo never made or examined.

“Billing government health programs for services never rendered—as Mayo allegedly did—is totally unacceptable,” said Lamont Pugh, III, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General for the Chicago Region, which includes Minnesota. “OIG will continue working with our law enforcement partners as well as private parties to investigate these cases and ensure the recovery of precious taxpayer dollars.”

After the government issued Mayo a subpoena regarding its surgical pathology billing, Mayo paid approximately $263,000 to the government. The settlement agreement reflects this payment, and Mayo agreed to pay an additional $1 million. Mayo must make its settlement payment within the next seven business days. Once payment has been received, the federal government will pay $229,822 to the whistleblowers who participated in the qui tam action. Mayo will pay their attorney fees and legal expenses.

This matter was brought by the U.S. Attorney’s Office for the District of Minnesota, the Justice Department’s Civil Division, the U.S. Department of Health and Human Services—Office of Inspector General, and the Federal Bureau of Investigation. Assistant U.S. Attorneys Chad Blumenfield and Ann Bildtsen are representing the United States.